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One big problem I see is the disparity between the treatment of cofounders and early engineers. Late stage employees will almost certainly will almost certainl
by cletus 15y ago
One big problem I see is the disparity between the treatment of cofounders and early engineers.
Late stage employees will almost certainly will almost certainly do (financially) better by working at Google or Facebook. I've seen th polls here where people talk about their exits and apart from a handful who essentially win the lottery, you'd predictably get more and work less at one of these two.
But why is it the last cofounder may get 30%+ with preferential shares and the first engineer gets 1% or less shortly thereafter?
It seems like an anachronism from the dot-com era when startup costs were much higher.
- Timothee 15y agoIt seems like an anachronism from the dot-com era when startup costs were much higher. I'm not even sure how that justified the situation then. Unless founders were to bring their own money. Do you mean that in the sense that it's now much easier for a programmer to build their own stuff, thus they might as well work for themselves rather than getting tiny equity for someone else?
- cletus 15y agoMeaning the ability to raise money was a prerequisite in the dot-com era because without money you had nothing so your ability to raise money elevated you to founder. Now bootstrapping or a small amount of angel funding can go a long way so equity models (IMHO) need to evolve if startups want to attract top talent, especially considering a joB at Google could easily net you $200k+ in total comp (and far more than that for top talent) with far lower risk.
- wisty 15y agoOne advantage early employees get is the possibility of promotion. If the company succeeds, they have a fair chance of getting a more senior position than they would otherwise be able to get. But this is true of any fast-growing company, not just fast-growing start-ups, and there's no guarantee.